The major objective of this project is to uncover the enzymatic steps involved in various genetic rearrangement reactions and to study the mechanism of action of the enzymes involved. We are currently concentrating our efforts on the mechanism of the transposition-replication reaction of bacteriophage Mu. By making use of a cell-free reaction system we developed several years ago, we have been able to divide the transposition reaction into two separate steps: (1) The first steps involves a pair of DNA strand transfers which generate an intermediate DNA molecular with a branched structure. The formation of the intermediate can be carried out by three purified protein factors; Mu A, Mu B and E. coli HU proteins. The Mu A protein binds to the Mu end DNA sequence specifically, and carries out the phosphodiester bond cleavage and joining steps. The Mu B protein possesses an ATPase activity which is stimulated by Mu A protein and DNA, and selectively stimulates the utilization of intermolecular target DNA molecules which do not carry Mu end sequences. The reaction requires a transposon donor molecule which has two Mu end sequences in their proper relative orientation and is negatively supercoiled, while the transposition target DNA can be in relaxed form. Evidence was obtained which indicates that recognition of the relative orientation of the two Mu end DNA sequences makes use of the energy of DNA supercoiling and requires a specific geometry of the Mu end DNA segments within the synaptic complex. (2) Intermediate DNA molecules can be converted into cointegrates by DNA replication or into simple inserts by nucleolytic cleavages and gap repair. This second reaction is supported by an E. coli cell extract and does not require Mu proteins.